@Greg Dickerson I had collected $1000 non-refundable EMD.

In our24 years of experience, managing almost 100 S8 leases currently, the average S8 tenant has a FICO under 580, numerous collections from utility & cell phone companies, doesn't want to pay a security deposit, much less an application fee and claims they don't know how to fill out their S8 paperwork despite being in the program for several years - hint: they want YOU to do it for them.Most, not all, are eligible for government assistance due to a funeral-march of bad choices.REALITY: you are trust trading one set of problems for another.You can succeed with S8, but you need to understand the challenges and plan accordingly.

The rents are collected weekly instead of monthly, so there are more rental periods each year, but I assume expenses may be higher as well.Does anyone have experience with SRO real estate?

The guru I paid $40k to mentor me told me I could outsource everything and just collect a check in my mailbox each month.  

That said, unless the amount you end up losing is substantial it likely won't be worth going after with the cost of litigation and also the effort to collect. 

if my wife is paid 30% of collected rents to manage the property it will reduce my Schedule E profit.

This will impact you financially, because you will have more vacancy and each vacancy will cost you more money to get it rent ready again.And on the maintenance side, GE appliances or your local plumber don't care what you are collecting in rent.  

Collected first rent and everything going smoothly so far.

Rent collection and expenses can be managed through a separate business bank account under the LLC, even if mortgage payments remain personal. 

If saving more helps you put more down on the rental AND you want to buy quickly, consider that route.If you are slow playing your next purchase, maybe you go a different route.Personally, I do not mind being more liquid and collecting interest or investing in the market vs paying debt down, but that is me...